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February 23, 2009

Excess accumulation

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Definition

Any amount by which  the RMD due for the year is short.
Example: If the RMD for the year is $10,000, and only $8,000 was distributed from the retirement account, the excess accumulation is $2,000 ( $10,000-$8,000).

Referring Cite

IRC § 4974, ; Treas. Reg. §54.4974-1

Additional Helpful Information

  • An Excess accumulation penalty applies to excess accumulations. However, the penalty may be waived by the IRS if the participant is able to establish that the failure to withdraw the RMD by the deadline was due to reasonable cause.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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